Introduction
Xero’s Fixed Asset feature streamlines how businesses track and manage their long-term assets. It automates asset registration, monthly depreciation, disposals, and reporting — reducing manual work for accountants and SMEs. By setting up automated depreciation schedules, businesses can maintain accurate financial statements with minimal effort.
How to Register a Fixed Asset in Xero?
Step 1: From the dashboard, go to Accounting, choose Fixed assets.
Step 2: Click New Asset.
Step 3: Complete the asset information fields:
Asset Name
Purchase Date
Purchase Price
Asset Type
The Accumulated Depreciation Account will automatically populate based on the selected asset type.
(Optional) Warranty, Serial Number, or Region
Step 4: Fill in Book Depreciation Settings:
Choose the Start Date
The Depreciation Method and Rate (%) will automatically apply according to the asset type.
(Optional) You may also enter the Residual Value and Cost Limit if applicable.
Step 5: Once all details are confirmed, click Register to save the asset.
Your asset is now recorded and ready for automatic depreciation tracking in Xero.
How to Set a Cost Limit for Fixed Assets?
Setting a cost limit in Xero helps you manage your assets more easily. It tells Xero which purchases should be treated as fixed assets and which should just be recorded as regular expenses. This keeps your accounts tidy and saves time when adding new assets.
Step 1: From the dashboard, go to Accounting, choose Fixed assets.
Step 2: In the Register section, find and select the asset you want to set a cost limit for.
Step 3: Click Edit Details.
Step 4: Under the book depreciation settings, enter the Cost Limit amount, then click Save to apply the changes.
How to Record Depreciation Automatically?
Step 1: From the dashboard, go to Accounting, choose Fixed assets.
Step 2: Click Run Depreciation. Xero calculates monthly depreciation automatically based on the selected method and useful life.
Step 3: Review the depreciation summary, then click Confirm to record the journal entries in your general ledger.
How to Sell or Dispose of a Fixed Asset
Step 1: From the dashboard, go to Accounting, choose Fixed assets.
Step 2: In the Register section, find and select the asset you want to dispose of.
Step 3: Click Dispose.
Step 4: Fill in the following details then click Show Summary.
Disposal date: Enter the date the asset was sold or disposed of.
Disposal proceeds: Enter the amount received from the sale (or zero if disposed without sale).
Sales Proceeds Account: Choose the account where the payment will be received.
Depreciation: Choose depreciation settings and set the date.
Step 5: Xero will automatically calculate any gain or loss on disposal. Review the details and click Review Journals.
Step 6: Enter the balancing account (for example, Gain/Loss on Disposal Account), then click Post to complete the process.
Once posted, the asset will be removed from the register, and your financial records will reflect the sale or disposal accurately.
How to Write Off a Fixed Asset
If an asset is no longer usable or has no residual value, you can write it off.
Step 1: From the dashboard, go to Accounting, choose Fixed assets.
Step 2: In the Register section, find and select the asset you want to write off.
Step 3: Click Dispose.
Step 4: Fill in the following details then click Show Summary.
Disposal date: Enter the date the asset was written off.
Disposal proceeds: Enter 0 (since the asset is written off, not sold).
Depreciation: Set the depreciation settings and set the date.
Step 5: Xero will automatically calculate any gain or loss on disposal. Review the details and click Review Journals.
Step 6: Enter the balancing account (for example, Gain/Loss on Disposal Account), then click Post to complete the process.
Once posted, the asset will be written off from the register.
How to Delete a Fixed Asset or Journal Entry?
If you’ve added a fixed asset or journal entry by mistake, you can delete it in Xero — but only if no depreciation or related transactions have been posted. Deleting removes the record completely from your books, so it should only be used for errors or duplicate entries.
Step 1: From the dashboard, go to Accounting, choose Fixed assets.
Step 2: In the Register section, find and select the asset you want to delete.
Step 3: Click the three dots (⋮) in the top-right corner and select Delete.
Step 4: Click Delete.
Note: You can only delete assets that have no posted depreciation journals or transactions linked.
If depreciation has already been run, delete the related journals first before removing the asset.
Reporting on Fixed Assets
You can view or export fixed asset data from:
Depreciation Schedule – Monthly depreciation overview
Fixed Asset Summary Report – Current asset value and status
Disposal Report – Track assets that have been sold or written off
Frequently Asked Questions (FAQs) about Fixed Asset Feature in Xero
Q: Can I change my depreciation method later?
A: No. Once depreciation has been run, you can’t change the method. You’d need to delete the depreciation journals and update the asset settings first.
Q: Can I import my fixed assets in bulk?
A: Yes, Xero allows importing fixed assets using a CSV template under Fixed Assets → Import.
Q: What happens if I record an asset below the cost limit?
A: It’s treated as an expense automatically, not as a fixed asset.
Q: How do I handle currency differences for imported assets?
A: The asset is recorded at the converted base currency rate at the time of purchase.
Q: Can I revalue an asset in Xero?
A: No, revaluations can only be handled manually using Journal Entries, as Xero doesn’t provide automated revaluation functions.
Conclusion
Managing fixed assets in Xero helps businesses maintain accurate records for depreciation and disposals while simplifying compliance. With automated depreciation and built-in reporting, accountants can save time, reduce errors, and maintain reliable financial data throughout the asset’s lifecycle.